By Debbie Gregory.

There are different types of crowdfunding.   One of them, rewards crowdfunding, has been characterized as the new seed-funding.  Most people think of Kickstarter as the crowdfunding model, with money donated for specific projects or products, often with a reward as “payment”

There are other effective types of crowdfunding including equity crowdfunding that involves selling partial company ownership through online sites.  There is also peer-to-peer lending that is crowdsourced loans from lenders that are not financial institutions.

If you are considering the reward and donation crowdfunding for your small business, below are some things to consider:

1. What is the Right Platform for You?

It is important to select the right platform especially with hundreds of them available.  As with any business decision, it makes sense to do some research selecting from the best crowdsourcing sites that have proven track records in your business industry, that offers similar incentives.  Additionally, it is important to find one with the right user demographics. The most popular sites are Kickstarter and Indiegogo, but there are others that might be a good fit as well.

One very important consideration is whether your company gets the money raised even if it does not meet its goal. Some platforms allow companies to access any money raised while others follow the all-or-none model. The latter can be devastating if the campaign does not hit its target, so this is a very important consideration.

2. What Are the Fees of the Platform?

Each site has its own fee structure. Sometimes that fee is different if the campaign fails to meet its goal. You should expect to pay 5% to 10% of funds raised just to use the site, plus credit card processing fees.

3. How to Structure Donation Perks

In the reward crowdfunding model, the funder often is given a perk in exchange for the donation. This can be a certificate, such as a virtual pat on the back, or multiple products when they are finally manufactured.

Rewards and shipping can easily eat into your proceeds. It certainly is possible to lose money on rewards, especially if the campaign does not reach its goal. Additionally, do not underestimate the amount of time needed for reward fulfillment and tracking.  This is time that might be better spent on marketing or development.

4. Before the Campaign is Live

It can be time consuming to raise money on crowdfunding sites.  Before the campaign begins, your company should clearly define its goals and develop a professional-looking video explaining how the money will be used and details about the project or product. This should also be clearly written out in the campaign text.

Next, develop a list of potential funders to target and begin publicity early. The campaign should not come as a surprise to those who already know about the company. It is imperative that in addition to current customers and friends, you must include industry influencers and media that can help spread the word and possibly contribute as well.

5. What to do During the Campaign

Once the campaign is live, the fundraising work continues full force throughout the duration. You can use social media to keep awareness up as well as email updates to current and potential funders. People are more willing to back a campaign that starts out successfully than one that lags, so the initial push should be huge. Please do not underestimate the amount of time required after the campaign is over to fulfill rewards and stay in touch with donors. The reputation of your businesss is on the line.

Crowdfunding can be an exciting and public way to announce a new venture and raise money for it. With this said, many campaigns fail, so it’s important to be ready to focus the time and energy needed to make the campaign a success.   VAMBOA wishes you great success.  Please stay tuned for the next article in this Crowdfunding series on the VAMBOA blog.

By Debbie Gregory.

Many VAMBOA members have been inquiring about Crowdfunding.  VAMBOA, the Veterans and Military Business Owners Association has decided to do a series of articles on Crowdfunding on our blog for our members and audience.

VAMBOA works very hard to provide valuable information and this is our goal.  We hope that you will enjoy these articles.  If any members have had direct experiences with Crowdfunding, please contact us and share your experiences.  You can do this by emailing info@vamboa.org.

You might have a great new business idea, but raising money for it can be difficult, and that can slow the momentum of your venture. The main obstacle may be the amount of money you need. Large sums of capital may be intimidating to investors, especially when it comes to an untested, early-stage company.

Crowdfunding is when businesses, organizations, or individuals fund a project or venture with small donations from many people. By receiving the necessary boost to cash flow, these ventures can get off the ground or launch new projects, products, and divisions.  Please do not take Crowdfunding for granted because it has raised billions of dollars for many businesses and organizations.

Thanks to the Internet, an alternative for entrepreneurs seeking investment money has emerged and is thriving. Crowdfunding allows businesses to pitch their ideas to a potentially vast audience via websites designed to connect them with investors.  An additional major advantage is that crowdfunding helps to secure investment dollars without relying on one source. Instead, businesses may aggregate smaller amounts from a few or many different individuals and small groups.

For these so-called retail investors, the payoff is the chance to learn about investment opportunities that were formerly limited to bigger banks, private equity groups and venture capitalists. They can get involved with as little as a few dollars and possibly be part of the next Apple or Facebook.   The opportunities with crowdfunding are unlimited.   It is important to understand it and do it right.   We hope to provide you a vast amount of information in this series of articles on Crowdfunding.

Small business crowdfunding has quickly become a viable trend over the last few years.  It has been made popular by many startup stories of success especially in the high technology sector.   A California based manufacturer in virtual reality headsets raised $2.4 million on the crowdfunding site, Kickstarter.  This company was later acquired by Facebook for $2 billion dollars.

According to Massolutions, a research firm, there are now more than 600 crowdfunding sites worldwide.   The World Bank estimates that crowdfunding will generate close to $100 billion in investments worldwide this year

Crowdfunding offers special incentives in exchange for donations. These perks can include and not be limited to anything from a mention of your name in credits on a film to a chance to obtain a free product or to hear personally from an author. By offering these perks, you can also avoid lending fees, interest payments and giving away company equity in exchange for the loan.  You may want to check out these types of details with your accountant or CPA.

The transparency of crowdfunding can be attractive to potential investors.  Companies are making their financial information, strategies, and goals readily accessible on crowdfunding platforms.  This helps potential contributors feel comfortable being a part of business crowdfunding.

Preparation will increase the likelihood of success. For entrepreneurs who want to use crowdfunding for their small business, building momentum before they post their ideas on a site is important. That means creating a good pitch for their business that will engage investors as well as inform them.

It is important that prior to presenting your venture on a crowdfunding site, make sure there is a demand for your product or service.  Next, determine the best way to market it. Clearly communicated evidence of potential demand is more likely to draw interest from investors. Some initial marketing outreach can create the sort of buzz that investors prefer to see as they analyze different crowdfunding pitches.

Start by building a lead capture page that is a standalone page providing basic information about your small business prior to the launch of a crowdfunding campaign. Some successful launches include enticing offers, such as a contest, to get users to input their email addresses.

Other good advice is not to get too greedy when you set up your funding goal.  Even if $500,000 will make your launch easier, aim for a smaller amount that you can reach early on and that will still help you.

This is important, because reaching financing milestones is another way to help attract other investors and to create momentum around your venture. Once your business starts thriving, you may garner the attention of a wider audience that may enable you to raise money in subsequent rounds of funding and, ultimately, increase sales.

Happy Crowdfunding to you and stay tune for the next article in this series on the VAMBOA blog.

By Debbie Gregory.

You may find yourself suddenly working from home due to COVID-19.   Working from a home office is not necessarily an ideal set-up. The reality is that you are most likely trying to figure out how to juggle a number of balls such as: making space in your home for video calls and meetings, keeping yourself productive, keeping your kids occupied so you can work will trying to maintain a grip on your overall mental well-being.

Below are a few more tips to assist you for working at home productively from your new home office, and help you maintain your overall mental well-being:

1.) Setup a Dedicated & Separate Workplace:   

If you are used to going into an office every day, the separation between your job and your home is physical separation. Working from home removes this separation.   It is important to your productivity to recreate separation with a designated physical workspace in your home. If you do not have the space for a dedicated room, a quiet corner of a least-used room will work. This space just needs to feel as separate as possible from home life.

Tips for a good home workspace:

• Make it as comfortable as possible
• Make sure it has good lighting
• Make sure you include every item you need to perform your job (printer, computer, phone, paper, pens, etc.)

2.) Establish a Clear Routine & Stick to It:

You and those you live with need to understand when you are working and when you are not. Staying close to the hours you normally worked from your office is a good plan. Working from home places you in charge of your environment and your work schedule. This means that you will have to hold yourself and be disciplined.

3.) Know When to Stop Working and Actually STOP:

Once you have established your work hours, you need to make sure that you stick to them and stop working at the “end” of your day. Do something at the end of your designated workday that helps you mentally shift from work mode and unwind such as a walk, yoga or reading.

4.) Organize Work & Plan Tasks for Each Day:

Regardless of where you are working, it is essential that you not only set a regular schedule for your day but you need to also keep track of all of your tasks including both pending and completed ones. You can use a variety of methods for this but here are some free online tools to consider:

• Tasks and project management: Air Table, NovaTools, Trello
• Sharing documents: Dropbox, Microsoft OneDrive, GoogleDocs
• Video conferencing: Skype, Zoom, Google Meetings
• Team communication: Whatsapp, Slack

5.) Take Regular Breaks:

Working from home may isolate from some interactions you would normally have each day. Make sure that you take regular breaks from work as you would if you were in a traditional office. Grab a cup of coffee, take a quick walk, make a personal call.

6.) Stay Connected with Others:

Make sure that you schedule regular talks with coworkers or managers, even if these chats are only a couple of minutes long. You need to be sure that you are still properly communicating with your coworkers and managers as issues or challenges arise and avoid problems.  Never hesitate to reach out to the same people that you would normally turn to for help. It is also a good idea to schedule informal chats with your coworkers  such as a virtual happy hour after work for a catch-up session.

7.) Consider Those in Your Home:

If you are suddenly working from home, you are probably not the only one in your house who is facing this new work-life balance. You may find yourself at home with your spouse, children, other family, roommates, etc. It is best to establish clear boundaries and share them with the other people in your home. Set times or queues for others so they know when you cannot be disturbed. Clear communication keeps your home happy!

Remember to be easy on yourself and others. We are all navigating a whole new way to work and live during these unchartered times. These tips should help you to setup your home office and keep your day flowing smoothly.  It is more important than ever to communicate, reach out, connect and take care of one another.

By Debbie Gregory.

The current COVID-19 pandemic has really changed how the world shops for everything including food, cosmetics, electronics, furniture, large appliances and more. Adding an eCommerce shop will not only expand your potential customer base, it can also help you prop up your business while people are unable to physically shop at your location.  It will lay the groundwork for long-term stability for your company once COVID-19 has passed.

In Part 1 of this mini-series, we covered selecting your online selling platform, the importance of the overall look and feel for your online store, how to add your products, how to set your prices, and a few thoughts on payment processing. Below are more tips to help you get your new eCommerce site up and running properly:

Set Up Email Notifications:

Automated email notifications will help you build trust, increase customer engagement and generate more sales. You will want to setup at least one, if not all, of the following automated emails:

• Abandoned cart email – prompts customers to return and purchase items they left in their cart.
• Confirmation of order email – assures the customer that you received their order.
• Delivery emails – can consist of more than one email notifying your customers where their orders are in the packing and delivery process.
• Product review request email – after delivery of their order within a week or two, ask customers to review their order on your site.

Shipping & Fulfillment:

You want to make it as easy as possible for your customers to purchase from you in the way that is best for them. There are a few ways you can handle order fulfillment and what you chose depends on how involved you want your physical location to be in the process. Basically there are four options to choose from:

• Buy online and the customer picks it up in your store
• Ship the order yourself to the customer
• Use a shipping provider to ship the items to your customer (such as Easyship, ShippingEasy, ShipStation, and more)
• Use a drop shipping or fulfillment service to ship the items to your customer (such as Doba, Oberlo, SaleHoo, and more)

Test Purchasing from Your Store:

Before you fully launch your new online store, make sure to do a full test run purchase from your own site. You need to be sure that everything is working properly before you start promoting your store to customers. Make sure to add products to your cart, fully complete the checkout process and be sure that all follow-up emails are going out as they should. If there is a hiccup in any of these processes, you need to be sure they are worked out before a customer is trying to purchase from you.

Advertise your New Online Shop:

Once you have everything setup, filled out and working properly, it is time to start bringing customers on your new shop site. There are many ways to advertise your new eCommerce site and you can be creative doing so. Below are a few ideas to get you started:

• Promote the online shop to your existing customers at your physical location
• Offer incentives to current customers to purchase online or to share your online shop with people they know
• If you have an email list, send a newsletter out letting people know about the new online store
• If you have established social media pages, promote your new store on all of them
• If you have a company blog, write about your new store
• Reach out to bloggers in your industry to ask them to write about your store
• This is a great time to start Pay-Per-Click campaigns (if you don’t already use them) with major search engines as well as social media platforms

What Else?

An eCommerce store needs the basic pages that every website needs. Items such as:

• FAQ (Frequently Asked Questions) pages
• Returns and exchanges policy page
• Privacy policy page
• Contact Us page
• About Us page
• And more

It is imperative during these challenging times to have a solid crisis management strategy for your business.  Using eCommerce can help your business weather this storm and possibly grow a whole new customer base. Setting your eCommerce store up will be challenging and time consuming but well worth it in the end!

By Debbie Gregory.

The current COVID-19 pandemic is dramatically shifting the shopping habits of everyone. With so many people at home, relying on online shopping for most of their current needs, and unable to shop in physical stores, now is the best time to shift your operations online. These tips can help you begin moving your existing physical store to an eCommerce platform to sell your products and services online.

Figure Out How to Sell Online:

There are a few options for selling your products online.  Your specific needs will help you to select the best online platform.  If you are a large retailer with a wide variety of products, you need a more comprehensive eCommerce platform than a smaller retailer with only a handful of different products. If you plan to keep your physical location, make sure that the platform you select allows you to track both online sales as well as in-store sales from a single integrated dashboard.

If you want total control over your online store, fees, tracking, and more, you will need to either add a store to your existing website or start a new shop site on a dedicated shopping platform. It is a good idea to explore each platform and see what they have to offer before making a selection. Below are a few of the most popular platforms:

• 3D Cart
• BigCommerce
• Helcim
• Shopify
• Square
• SquareSpace
• Stripe
• WooCommerce
• Volusion
• X-Cart

Of course if you do not have any desire to launch your own website, you can setup an account, or seller store, in any of the established online marketplaces, such as:

• Amazon
• eBay
• Etsy

Design the Look & Feel of Your Store:

Once you have selected how you want to sell online and purchased your platform, it is time to customize your new storefront. You want to make sure that your new storefront matches any existing company branding, colors and the overall look & feel of your brand.  After your design is ready, you can begin adding products.

Adding Products:

High quality, attractive, fully filled in listings are essential for your online store to be successful. Polished and well laid out pages will help establish your store and keep shoppers interested in your items. Every product listing needs to include:

• A product title or name
• A detailed product description
• High quality photos
• Any information about sizing
• Shipping and tax information

Set Your Prices:

Your prices may need to change a bit in your online shop from what they may be in your physical location. You will need to consider the “overhead” of selling online before you set your prices. Your online shop has new fees for you to take into consideration, such as:

• Packaging costs
• Shipping costs
• Taxes
• eCommerce platform fees
• 3^rd party application fees
• And more

Make sure make a list of all of your new fees and remember to do some research on items similar to your offerings to make sure that you are pricing your items competitively while at the same time covering all of your costs.

Checkout  & Payments:

The ability to accept payments online is essential to every online store. Most eCommerce platforms come with built-in payment processing or a merchant account.  If you decide to go it alone, you may need to sign up with a third-party platform to secure payments. Just make sure that whatever payment processing platform you select, that there are safeguards in place for your customer’s sensitive banking data. Protecting this sensitive information is the seller’s responsibility, so choose carefully.

Be on the look-out for Part 2 that will cover email notifications, shipping & fulfillment, advertising your new store and other pages you will want to include when building your new eCommerce store.